What Is a CP2000 Notice?
A CP2000 notice informs you of discrepancies between the income reported on your tax return and the information submitted to the IRS by third parties, such as employers or financial institutions. It proposes changes to your tax return and suggests that additional taxes may be owed. However, the notice is not a bill but a proposal requiring your response—either to agree or disagree with the IRS’s findings.
How to Respond to a CP2000 Notice
- Review the notice: First, carefully examine the discrepancies outlined by the IRS.
- Compare documents: Next, match the notice with your tax records, like W-2s or 1099s.
- Decide on your response: Then, determine whether you agree or disagree with the proposed changes.
- Provide supporting documentation: If you disagree, gather the necessary documents to support your claim.
- Submit your response: Finally, send the required documents and response form to the IRS within the specified timeframe.
Common Reasons for Receiving a CP2000 Notice
| Reason for CP2000 Notice | Description |
| Unreported Wages or Income | Income from W-2s, 1099s, or other sources was not reported. |
| Incorrect Tax Form Information | Mismatches between tax forms like W-2s or 1099s and your return. |
| Missing Capital Gains or Losses | Sales of assets were not properly reported. |
| Retirement Income Not Reported | Distributions from retirement accounts weren’t declared. |
| Third-Party Reporting Errors | Information provided to the IRS by third parties is incorrect. |
FAQs on CP2000 Notices
1. What is a CP2000 notice?
A CP2000 notice alerts you about discrepancies between your reported income and the data the IRS has received.
2. How do I respond to a CP2000 notice?
You can either agree with the IRS’s proposed changes or dispute them by submitting documentation supporting your original tax return.
3. What happens if I ignore a CP2000 notice?
Ignoring the notice can result in additional taxes, penalties, and interest.
4. Can Dimov CPA help with CP2000 notices?
Absolutely. Dimov CPA can review CP2000 notices, prepare responses, and represent you before the IRS.
